Call Me a Doubter
A Primer for Purchasing a “Flipped” House
by Jamie Dunsing, owner
Call me a doubter. “Flipped” houses did this to me. Prior to the 2007-2010 Great Recession, I hadn’t heard the term. We called these types of homes “Rehabbed”.
Speaking with other home inspectors, and others involved in the real estate business, it’s clear that most are wary of flipped homes. We’ve seen too many of these homes that had major remodeling done that did not have the proper (or any) building permits, workmanship is poor, and generally, it is obvious that the contractors who worked on the home were not professionals. Most are jack-of-all- trades type of contractors. You know the ones – the guy who has a shiny new pickup truck and his “workers” act like Sergeant Schultz from Hogan’s Heroes, “I know nothing, NOTHING!”. Call me a doubter. https://www.youtube.com/watch?v=UmzsWxPLIOo
… it is obvious that the contractors who worked on the home were not professionals. Most are jack-of-all- trades type of contractors. You know the ones – the guy who has a shiny new pickup truck and his “workers” act like Sergeant Schultz from Hogan’s Heroes, “I know nothing, NOTHING!”
Too often, the home has large portions of the structure or systems that are covered over. Vague descriptions of “newer wiring”, and “updated mechanicals” are described to the purchaser. After an inspection, the “newer wiring” turns out to be a new distribution panel in the basement along with GFCI outlets in the kitchen and bathrooms, but none of the old cloth insulated wiring having been replaced. “Updated mechanicals” means that a Nest thermostat was installed. The buyer sees only shiny new cabinets, counters, and appliances. Call me a doubter.
These homes require an extra level of due- diligence when purchasing. Often, major portions of the home are concealed in an effort to gain maximum living space. While this isn’t necessarily a bad thing, a buyer needs to understand that nobody can see behind the finished walls to determine what the condition of the original structure or systems was. Just recently, I was at a home that had an old front porch converted to a finished room that connected to the home’s living room. Surprising to the buyer, the crawlspace below the old porch was not accessible for inspection. This created some concern for me, as another area of this particular home had termite damage. Without access to the crawlspace, we couldn’t determine if there was any additional termite damage, or even if the flipper had taken the time to put in the proper foundation below the old porch. Call me a doubter.
Without going in depth, I’ve assembled a short list of things that a buyer should check on when purchasing a flipped home:
- Make sure that the flipper got building permits from the local building department. Equally as important, make sure that the permits were for the full scope of work that was done, and not just “replace windows”.
- Check the flipper’s reputation
- Contact their old clients. Dig deep here. Find out if the reference knows the flipper. Get more client names. Check with them.
- Check the flipper out on BBB, Yelp, or other social media
- How long have they been in business?
- Who did the work?
- Get a list of contractors
- Get a copy of their contracts. If the builder doesn’t want to share costs with you, have them black out the $ signs. These contracts will help you understand the scope of the flip.
- Does the flipper provide a guaranty or warranty?
- What is included?
- Is it just warranties on the appliances?
- Do the various appliances and mechanical Equipment have warranties from the manufacturers and installers?
- Get all of this in writing
If the flipper can provide all of these items, jump on this house! Get a home inspection. You’ll be glad you did.